October 21, 2013
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Forex Trading Asian Session

This article is about the Asian forex trading session and covers the pairs you should trade, as well as the times you should trade.

Asian Session Forex Trading

Before you make the decision about the best times for you to trade, you need to be aware of the various trading sessions linked to the major forex trading centres.  Not only should you be aware of the trading times, but the trading days are as important.  Some of the centres are more active than others on certain days of the week.  The busiest forex trading times are during the overlap sessions because the volume is greater as two centres will be trading simultaneously.  The overlap periods occur during the Tokyo/London and the London/New York sessions.

Tokyo or Asian Forex Trading Session

The market times for this session commence at 00h00 GMT.

Aspects

  • During this period the main participants in the market include large commercial entities and central banks.  The main commercial trades are between Japan and China during this period as Japan is extremely dependent on exports and China is one of their chief trading partners.
  • As economic data is released at the commencement of this period, it makes the market busier at that point
  • The liquidity levels are not high during this period and you could spend time waiting for events to occur
  • The trading mood for the rest of the trading day may be set during this session.  Traders who enter the market during the latter sessions take a view of this session to assess the best strategies to use
  • If the New York session experienced large movements, you may notice the consolidation taking place during the Tokyo session

Trading Pairs

During this session you will receive news releases from Australia, New Zealand and Japan.  These should be the countries you focus on if you are trading forex news.  The Japanese yen is particularly volatile at this point due to the level of commercial transactions by Japanese corporations.  You should also be aware of the movements initiated by China and focus on news announcements from that region as well.  Australia and Japan depend fairly heavily on Chinese demand and this may cause huge movements between the Australian dollar and Japanese yen pairs when China releases its economic data.

There are particular currencies that will experience strong movement during this session.  Currency pairs such as the Australian dollar and the New Zealand dollar paired with the US dollar are always popular.  Currency pairs like the British pound with the US dollar are not popular at all.

Liquidity is normally not very high during this trading period which means that most of the currency pairs tend to range.  This makes it a perfect time for short day trades or maybe breakout trades during the last portion of the session.

This particular session is where the forex trading day commences.  To take account of this, it is necessary for you to choose your pairs carefully.  It is important to keep abreast of the Asian news releases and always keep in mind the impact of China on this particular market.

You need to determine the most suitable pairs to trade during this session as well as the best days to trade those pairs.  This will become clear to you if you do research and keep up to date on the economic events in the region.

 

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